The UK government recently unveiled a £700 million package aimed at jumpstarting the electric vehicle (EV) transition. At the heart of the plan is a £640 million subsidy scheme to help drivers cover the upfront cost of a new electric vehicle, and an additional £63 million to expand EV charging infrastructure.

The message from Transport Secretary Heidi Alexander is clear: electric vehicles must become more accessible to the average motorist. “There are a lot of people out there who think that EVs are just for the very wealthiest,” she admitted to The Telegraph. And on the surface, she’s not wrong. The average price of a new electric car in Britain is just shy of £50,000, more than double the cost of a typical petrol model.

But the message beneath the headline is more ambiguous. Is this plan enough to truly democratise the EV market? Or is it just another patchwork attempt to meet the looming 2030 petrol and diesel car ban, without fully reckoning with the underlying economics of the transition?

Too steep for the mass market

Let’s be blunt: for the vast majority of households in Britain, a £50,000 vehicle is simply not in the realm of possibility. Even with a government grant, rumoured to prioritise UK-made EVs like the upcoming Nissan Leaf from Sunderland, the affordability gap remains vast. The previous Conservative government scrapped EV subsidies in 2022, claiming the market had matured. Since then, demand from private buyers has plummeted, with new consumer EV enquiries dropping 65% year-on-year.

It’s not just the sticker price. EVs face high depreciation rates due to battery degradation, and many consumers remain wary of both their long-term reliability and resale value. Buying an EV is still perceived by many as a financial risk, not a forward-looking investment.

This is the crux of the problem: net zero targets depend on mass adoption, but mass adoption depends on affordability. And the market has failed to close that gap on its own.

A patch for a broken model?

To be fair, the government’s new package includes more than just subsidies. Councils will receive £25 million for cross-pavement gullies, allowing people in terraced houses to charge their EVs at home using cheaper electricity rates. A further £63 million will expand public charging infrastructure and improve signage, a necessary step to address so-called “range anxiety.”

Yet infrastructure is not the primary barrier, it’s economics. According to the Society of Motor Manufacturers and Traders (SMMT), EVs accounted for about 20% of new car sales in the first half of 2025. But that growth is increasingly driven by fleet and leasing schemes, not individual consumers.

Motability

One potentially transformative idea comes from Julian Rose of Asset Finance Policy, who argues that the government could build on the existing Motability scheme to create a fairer and more effective solution to the EV affordability crisis. Rose proposes a revised scheme focused on used EVs and hybrids, with eligibility expanded to include not just those with medical conditions, but also households on low incomes.

Key to the idea is removing VAT from lease payments, as with the current Motability model, and offering a modest upfront grant, perhaps £1,000, to reduce monthly payments. Rose also suggests capped interest rates and using the proven administrative frameworks of Clean Air Zone vehicle replacement schemes to prevent abuse. This approach, he argues, would not only “help struggling families obtain vital mobility at an affordable monthly cost,” but would also “strengthen the used car EV market,” reducing depreciation risk and encouraging new EV purchases.

With used EV prices currently low, Rose sees this as a “one-off opportunity” to both support families and build resilience into the second-hand EV market – complementing, not competing with, the government’s newly announced subsidy programme.

Leasing

Meanwhile, private leasing continues to offer a critical bridge. UK-based Leasing.com and continental initiatives like Belgium’s LIZY have made second-hand EV leasing more accessible, offering fixed monthly costs that are often lower than car loans. These platforms are proving essential for younger, urban drivers and SMEs who need flexibility and lower upfront investment.

Such business models show that affordability isn’t just about the purchase price, it’s about the total cost of use. Leasing could help normalise EVs in the public mind and serve as a bridge to wider ownership, but these solutions are only scalable if backed by supportive policies and a competitive second-hand EV market.

Risk of a two-tier transition

What the government is offering now is a partial step forward, welcome, but insufficient. A £640 million grant scheme may provide short-term stimulus, especially for British-made models, but it won’t fix the structural problems of price, depreciation, and market segmentation.

There’s a very real risk we’re heading toward a two-tier EV transition: one where company fleets and wealthy households lead the charge, while ordinary drivers are left behind. That undermines both climate goals and social equity.

If this revolution is truly meant for everyone, then it can’t be designed around those who can already afford to participate. The electric future must be one the average person can actually buy into, literally.

So yes, £700 million is a big number. But unless it translates into genuine affordability for the mass market, it won’t be nearly enough.